Augusta
VIP Contributor
If you are lender with interest then you would have had bad debt at some points. Bad debts are irrecoverable loans that you need to write off at the end of the day because you can't get the borrowers to pay.
This ruins a business, because you might have a lot of them that goes same way. So how can be avoid having bad debt from onset. You should always do the following:
Give out big loans to those that have collateral that are equivalent to the amount borrowed
Lend in bits to new borrowers, to assess their credit worthiness
Try to lend more to salary earners and have agreement with their account officers to deduct your own percentage payment from source maybe monthly
What do you think?
This ruins a business, because you might have a lot of them that goes same way. So how can be avoid having bad debt from onset. You should always do the following:
Give out big loans to those that have collateral that are equivalent to the amount borrowed
Lend in bits to new borrowers, to assess their credit worthiness
Try to lend more to salary earners and have agreement with their account officers to deduct your own percentage payment from source maybe monthly
What do you think?